Nigeria’s bond market remained bullish this week, with government securities recording a notable drop in yields as investors positioned ahead of fresh issuances for September. Optimism around a potential slowdown in inflation has been a major driver of renewed confidence in the fixed-income space.
Traders in the secondary market reported sustained demand for Federal Government of Nigeria (FGN) bonds, a trend reinforced after the government’s medium-term expenditure framework highlighted a preference for domestic borrowing. This development has further strengthened expectations that yields could be repriced in the coming weeks.
Market watchers are closely awaiting the release of the August Consumer Price Index (CPI) by the National Bureau of Statistics (NBS), which is projected to confirm a gradual disinflationary trend.
According to dealers, bullish trading led to a 15 basis point decline in the average yield, which now stands at 16.68 percent compared to the previous session. Buy-side appetite was heavily concentrated in short-to-mid-tenor papers, while long-dated maturities remained largely stable as investors exercised caution.
Prices of key bonds rose during the session, with strong bids recorded for the 2029 and 2030 maturities. Analysts at investment firms revealed that yields contracted across segments: short-term papers dropped by 24 basis points, mid-term by 22 basis points, and long-term by 1 basis point.
Specifically, the APR-2029 bond fell by 51bps, APR-2032 declined by 48bps, and JUN-2053 edged down by 1bp. Fixed-income experts attributed the contraction to sustained demand across priority maturities, suggesting that investor sentiment could remain positive if inflation data aligns with expectations.
